Definition of Nafta North American Free Trade Agreement

The North American Free Trade Agreement between the US, Canada and Mexico came into force in January 1994. Nafta eliminated tariffs and created the world's largest free trade area, linking 450m people producing $17tn worth of goods and services.

US goods and services trade with Nafta partners totalled $1.6tn in 2009. Canada and Mexico were the top two purchasers of US exports in 2010 (Canada $248.2bn and Mexico $163.3bn) and US exports to Nafta accounted for 32.2 per cent of overall US exports in 2010. Canada and Mexico were also the second and third largest suppliers of goods imported to the United States in 2010.

Nafta in the news

In February 2014 there was a summit to mark the 20th anniversary of the North American Free Trade Agreement. Dubbed the "Tres Amigos Summit" it was a time to consider how successful the agreement had been. An FT article noted that instead of a process of inexorable convergence, per capita Mexican gross domestic product remained a fifth of that in the US.